CarePoint tries again to buy Saint Mary's but hospital intends to stick with Prime

The board of St. Mary's Hospital, the last hospital in Passaic, announced today that it has reached an agreement to be bought by Prime Healthcare Services, a for profit chain based in California.Google Maps

PASSAIC — CarePoint Health, the healthcare company that owns three hospitals in Hudson County, has made another offer to purchase Saint Mary's in Passaic.

This is not the first offer CarePoint has tried to acquire the hospital, which is currently in an agreement to be bought by Prime Healthcare.

The problem for CarePoint is that despite its persistence, the Saint Mary's board remains steadfastly loyal to Prime Healthcare, a California-based company currently seeking to buy several hospitals in New Jersey.

“Prime is the best match for our hospital and our community, and we remain in an exclusive arrangement with them," said Vanessa Warner, a hospital spokeswoman. "As a successful healthcare system, Prime has the ability to follow through on all the terms and conditions of the Asset Purchase Agreement. The Hospital will continue this arrangement since due diligence has shown that Prime will have a tremendous positive impact on St. Mary’s Hospital, its employees, and the community it serves."

In a letter dated Oct. 11, CarePoint's attorney argues that the exclusivity between Prime and Saint Mary's has expired.

It is not clear whether lawyers from Saint Mary's would agree with that assessment, but even if they did, the hospital's board is under no obligation to accept another offer.

The letter also reiterated CarePoint's promise to fully fund the pensions of certain Saint Mary's employees. Prime is only partially funding those pensions.

A Prime spokesman referred all questions to Saint Mary's.

Prime Healthcare and CarePoint Health, which owns Hoboken Hospital, Bayonne Hospital and Christ Hospital in Jersey City, both bid on Saint Mary's but the hospital's board chose Prime and a deal was announced in January.

Since then, state Department of Health officials have spent months asking Prime representatives a litany of questions in an effort to determine if they should grant Prime permission to do business in New Jersey.

The latest round of questioning asked about a succession plan should Prem Reddy, Prime's CEO, no longer be able to serve. The company he runs has been the subject of a long-running U.S. Department of Justice investigation, though there have been no accusations of wrongdoing.

Despite the delay, Saint Mary's officials believe the deal will soon be approved.

"Acquisitions are very complex transactions," Warner said. "The process is progressing as expected.”